Introduction
The lessor refers to a property owner who wants to give his property on a lease; they must enter into a lease agreement and must sign it to make it a legally valid document. The lease agreement defines the terms and conditions of the lease. As we refer to the legal definition of a lease, it is an agreement that is made between the parties, where one party is a property owner who transfers the right to use an immovable property to another party. A property owner who transfers the right is called a lessor, and the other party to whom the right has been transferred is called a lessee. In this article, we explore what a lessor is and what its rights and responsibilities are while renting a property. So please stay tuned and read below.
What is a Lease Agreement?
The Transfer of Property Act, 1882, Section 105 deals with a lease. According to this provision, a lease is a transfer of the right to enjoy immovable property for a specific time, express, implied or in perpetuity. The consideration involved in a lease is known as premium (one-time) or rent (periodic), which is made between an owner (lessor) and a tenant (lessee) as an agreement. In a lease, the owner of the property transfers the possession of the immovable property for enjoyment to the lessee, but the ownership right is still held by the owner.
The Parties Involved in a Lease:
Mainly, two parties are involved in a lease, such as
Lessor:
The transferor of possession of immovable property as an owner, or on behalf of someone’s authority to transfer.
Lessee:
The transferee who agrees to the terms and conditions of a lease.
Essential Elements of a Lease:
Parties:
The parties who entered into a lease agreement must be capable of entering into the contract.
Subject Matter:
The subject matter of a lease is immovable property.
Time period:
The duration of a lease is for a specific time, perpetuity, or is implied.
Premium:
The specific amount paid for obtaining a lease.
Rent:
Money or services rendered.
Who is a Lessor?
A lessor is an owner of immovable property who gives the right to use that property to another party through a lease agreement. In simple words, we can say that a lessor is the owner of immovable property who gives possession to use to the tenant for a specific duration on a rental basis, which is defined under the lease agreement. Here, the owner is known as a lessor, and the tenant who receives the right to the enjoyment of immovable property is known as a lessee. After the signing of a lease agreement, a lessor holds the ownership right of the property.
Key details about Lessor:
Role:
As a property owner, a lessor is a party who grants the lease.
Ownership:
After giving the lease of the asset for a particular duration, a lessor still holds the legal ownership of the leased property.
Compensation:
A lessor holds the right to compensation, either periodic or one-time, from the lessee.
Responsibilities:
Responsibilities of a lessor depend on the nature of a lease agreement. They may be responsible for property taxes, maintenance, and insurance of the leased property.
Types:
A lessor can be an individual owner of the asset, a company, or an entity.
What are the Rights of a Lessor?
There are some legal rights given to a lessor under the law, which are listed below.
Right to collect Rent:
A lessor holds the right to collect rent from the lessee, which is specified under the lease agreement.
Right to accretion:
A lessor holds the right to make any additions to the leased property during the lease term.
Right to Terminate a Lease:
Both the leasing parties, such as a lessor and a lessee, can end the lease by mutual understanding.
Forfeiture:
A lessor has a right to terminate the lease via forfeiture. A lessor also has the right to reclaim the property if he needs or requires.
Liabilities of a Lessor:
A lessor has certain liabilities, which are listed below.
- A lessor cannot create any interruption during the tenancy period of a lease. Because a lessee has a right to use such property under the terms and conditions of the lease agreement.
- A lessor has a responsibility to disclose any material defect in the property.
- A lessor must allow the lessee to enjoy the leased property, as per the terms and conditions of the lease agreement.
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